China PM predicts battle for growth

China’s National People’s Congress has set the country’s growth target for 2016 at a lower range of 6.5%-7%.

Premier Li Keqiang made the announcement in his opening speech, warning of a difficult battle ahead.

The annual meeting in Beijing sets out to determine both the economic and political agenda for the country.

It comes at a time when China struggles with slowing economic growth and a shift away from overreliance on manufacturing and heavy industry.

The party congress is also expected to approve a new five-year plan, a legacy of the communist command economy.

“China will face more and tougher problems and challenges in its development this year, so we must be fully prepared to fight a difficult battle,” Mr Li told delegates on Saturday.

Last year, China’s goal was about 7%. The economy actually grew by 6.9% – the lowest expansion in 25 years.

Mr Li also said that China was targeting consumer inflation at around 3% and unemployment within 4.5%”.

Meanwhile, report from China News Agency says the country’s defence spending will be raised by 7.6%.

China’s congress is a highly choreographed, largely rubber stamp affair, but Premier Li’s opening address can at least be gleaned for clues about the overall direction of policy.

This year’s congress is overshadowed by the current economic strains as China experiences slowing economic growth and extreme volatility in stock markets The stock market slump had seen indexes lose more than 30% of their value in 2015 and led to large-scale government intervention of limited success.

Beijing has also been accused of guiding the yuan currency lower to boost the competitiveness of Chinese exports on the global market.

Shift in economy

There also is concern over rising unemployment as Beijing seeks to gradually shift its economy from overdependence on manufacturing and industry towards more services and consumer spending.

A government official said earlier this week that 1.8 million workers were expected to be laid off in the steel and coal industries.

With Beijing keen to prevent social unrest, the government has tightened its grip on dissenters and government critics.